GenSeneca
Well-Known Member
Actually, I was pointing out the statistical probability of having a balanced budget, relative to spending as % of GDP, based on the historical-empirical data concerning revenue as a % of GDP. Historically, over the last 40 years, the government has averaged 18% of GDP, the high was 20.9% (during the tech bubble) and the low was 16.1% (during the recession that followed).The revenue collected from taxation has never gone lower than a certain amount and never higher than a certain amount no matter how high or confiscatory the rates have been set. If I am not mistaken, and I am guessing a bit here, the lowest amount of revenue generated has been 17% and the highest has been 21%. The problem is and has always been spending and not how much revenue is collected. Additionally, the gov is not capable of predicting or controlling how much revenue it collects so it might as well learn to live between 17% and 21%. some wise sage here said it should set its budget as if it will collect 17% then any year in which more is collected is a bonus.
We're spending 24% of GDP now - Probability of surplus = 0.0% (0 times in 40 years)
If we spend 20% of GDP - Probability of surplus = 5% chance (twice in 40 years)
If we spend 18% of GDP - Probability of surplus = 50% chance (20 of 40)
If we spend 16% of GDP - Probability of surplus = 100% chance (40 of 40)
16 Trillion is a lot of debt but that's the molehill, our unfunded liabilities in the hundreds of trillions are the mountain. If we take ALL our nations debt into account, government would have to be cut all the way down to the low single digits and have perpetual GDP growth in the double digits but even then we would only have a fraction of a chance to achieve long term fiscal solvency.